Bitcoin Declines Amid Trade Tariff Uncertainty and Fed’s Interest Rate Outlook

Bitcoin edged lower on Tuesday, marking its third consecutive day of declines, as market participants adopted a cautious stance amid ongoing uncertainty surrounding U.S. trade tariffs and the Federal Reserve’s interest rate outlook. The world’s largest cryptocurrency dipped 0.8% to $95,424.7 by 01:14 ET (5:14 GMT).

Crypto Investors on Edge: Awaiting Clarity on U.S. Tariffs and Interest Rates

Investors are closely monitoring developments in U.S. trade policy, as President Donald Trump’s administration indicated the possibility of new reciprocal tariffs on every country taxing U.S. imports. The potential for escalating trade tensions has raised concerns over a slowdown in global economic growth, which could negatively impact risk assets like Bitcoin.

Cryptocurrencies, often viewed as a barometer for risk appetite, are particularly sensitive to shifts in macroeconomic sentiment. As a result, Bitcoin and other cryptos are experiencing caution among investors.

In addition, markets are awaiting clarity on the Federal Reserve’s monetary policy stance. Last week’s release of the U.S. Consumer Price Index (CPI) showed that inflation remains above the Federal Reserve’s 2% target. This has led to speculation that the central bank may maintain a more hawkish stance for a longer period. Higher interest rates tend to reduce the appeal of non-yielding assets like Bitcoin, as investors seek safer returns in traditional markets.

Hong Kong Firms Launch Stablecoin Venture

In more positive news for the crypto space, Standard Chartered Bank (Hong Kong), Animoca Brands, and Hong Kong Telecommunications (HKT) have teamed up to launch a Hong Kong dollar-backed stablecoin. The joint venture aims to apply for a license from the Hong Kong Monetary Authority (HKMA) to issue this stablecoin, leveraging Animoca’s blockchain expertise and HKT’s telecommunications services.

This move is part of Hong Kong’s broader initiative to establish itself as a leading cryptocurrency hub. The introduction of stablecoins and cryptocurrency exchange-traded funds (ETFs) is gaining traction, offering more secure and accessible investment opportunities for a wider range of investors in the cryptocurrency market.

Altcoin Market Overview: Solana and XRP Experience Significant Losses

While Bitcoin saw modest declines, most altcoins dropped more sharply, following a broader risk-off sentiment in the market.

• Ether (ETH), the world’s second-largest cryptocurrency, ticked down 0.8% to $2,663.8.
• XRP (Ripple), the third-largest crypto, fell 4% to $2.5684.
• Solana plunged 9.1%, marking one of the steepest declines in the altcoin market.
• Polygon (MATIC) saw a 5.1% drop.
• Cardano (ADA) was down 3.4%.

Among meme tokens, Dogecoin dropped 5.3%, while $TRUMP fell 7.6%, reflecting broader market pessimism.